Ambev Reports 2016 Fourth Quarter and Full Year Results Under IFRS
Thursday, March 02, 2017 1:40:00 AM ET
Ambev S.A. [BOVESPA: ABEV3; NYSE: ABEV] announces today its results for the 2016 fourth quarter and full year 2016. The following operating and financial information, unless otherwise indicated, is presented in nominal Reais and prepared according to International Financial Reporting Standards (IFRS), and should be read together with our financial information for the twelve-month period ended December 31, 2016 filed with the CVM and submitted to the SEC.
Operating and Financial Highlights
Top line performance: Top line was flattish in the quarter (+0.4%), as solid growth in CAC (+8.9%) and LAS (+19.3%) was impacted by a decline in Brazil (-9.7%) and Canada (-0.5%). Volumes were down 5.6% while net revenue per hectoliter (NR/hl) was up by 6.3%. In the full year, top line increased 1.9%, as Brazils top line decline (-5.2%) was more than offset by solid performance in (i) CAC (+14.0%), as our business in the region continued to grow; (ii) LAS (+15.8%), due to a strong NR/hl performance partially offset by volumes decline in Argentina; and (iii) Canada (+0.7%). On a consolidated basis, volumes declined 5.8% mainly explained by Brazil and Argentina, where the challenging macroeconomic scenario continued to put pressure on consumers, while NR/hl was up by a solid 8.3%, due to our revenue management initiatives.
Cost of Goods Sold (COGS): Our COGS increased 6.8% in the quarter, while on a per hectoliter basis COGS was up by 13.1%. In the full year, COGS and COGS/hl increased 6.5% and 13.1%, respectively, mainly driven by Brazil.
Selling, General & Administrative (SG&A) expenses: SG&A (excluding depreciation and amortization) was up by 7.5% in the quarter and 7.6% in the full year, mainly explained by higher sales and marketing expenses, as we continued to invest in our brands, partially offset by efficiency gains in administrative expenses across all our operations.
EBITDA, Gross margin and EBITDA margin: Normalized EBITDA was R$ 6,015 million (-12.1%) in the quarter with gross margin and EBITDA margin compression of 210bps and 650bps, respectively. In the full year, EBITDA was R$ 19,483 million (-6.9%) with gross margin contracting 150bps and EBITDA margin contracting 410bps, driven by Brazil (-820bps) and Canada (-50bps) partially offset by CAC (+220bps) and LAS (+180bps).
Net Profit, Normalized Net Profit and EPS: Net Profit reached R$ 4,834 million in the quarter, 13.5% above 4Q15, while on a normalized basis Net Profit declined 15.9% to R$ 3,656 million. In the full year, Net Profit was up 1.6% to R$ 13,083 million, while adjusted by exceptional items, Net Profit was down 9.7% to R$ 11,949 million, as EBITDA decline and higher net finance results due to the cost of carry of our hedges and non cash accretion expenses related to our investment in the Dominican Republic were partially offset by a lower effective tax rate. EPS was R$ 0.80 and Normalized EPS was R$ 0.75 in the full year.
Operating Cash Generation and CAPEX: Cash generated from operations reached R$ 7,920 million in the quarter while R$ 17,702 million in the full year. CAPEX totaled R$ 4,133 million, with CAPEX Brazil declining 35% year over year (R$ 1,969 million), in line with our guidance.
Pay-out and Financial discipline: During 2016, we returned R$ 10,046 million to equity holders in dividends and interest on capital. As of December 31st, 2016, our net cash position was R$ 2,763 million. This figure does not include the dividend payment of R$ 0.07 per share (approximately R$ 1.1 billion) announced on December 22nd, 2016, made as of February 23rd, 2017.
Financial highlights - Ambev % As % % As %
R$ million 4Q15 4Q16 Reported Organic FY15 FY16 Reported Organic
Total volumes 47,948.9 45,358.4 -5.4% -5.6% 169,078.2 159,821.6 -5.5% -5.8%
Net sales 15,296.2 13,177.5 -13.9% 0.4% 46,720.1 45,602.6 -2.4% 1.9%
Gross profit 10,367.2 8,569.9 -17.3% -2.7% 30,658.8 28,924.6 -5.7% -0.5%
Gross margin 67.8% 65.0% -280 bps -210 bps 65.6% 63.4% -220 bps -150 bps
Normalized EBITDA 8,021.4 6,014.7 -25.0% -12.1% 22,209.7 19,483.1 -12.3% -6.9%
Normalized EBITDA margin 52.4% 45.6% -680 bps -650 bps 47.5% 42.7% -480 bps -410 bps
Profit 4,258.5 4,833.7 13.5% 12,879.1 13,083.4 1.6%
Normalized Profit 4,349.3 3,655.8 -15.9% 13,236.3 11,949.1 -9.7%
EPS (R$/shares) 0.26 0.30 12.4% 0.79 0.80 1.0%
Normalized EPS 0.27 0.25 -8.0% 0.81 0.75 -7.5%
Note: Earnings per share calculation is based on outstanding shares (total existing shares excluding shares held in treasury).
This press release segregates the impact of organic changes from those arising from changes in scope or currency translation. Scope changes represent the impact of acquisitions and divestitures, the start up or termination of activities or the transfer of activities between segments, curtailment gains and losses and year over year changes in accounting estimates and other assumptions that management does not consider as part of the underlying performance of the business. Unless stated, percentage changes in this press release are both organic and normalized in nature. Whenever used in this document, the term "normalized" refers to performance measures (EBITDA, EBIT, Profit, EPS) before special items adjustments. Special items are either income or expenses which do not occur regularly as part of the normal activities of the Company. They are presented separately because they are important for the understanding of the underlying sustainable performance of the Company due to their size or nature. Normalized measures are additional measures used by management and should not replace the measures determined in accordance with IFRS as indicators of the Companys performance. Comparisons, unless otherwise stated, refer to the fourth quarter of 2015 (4Q15) or full year 2015 (FY15). Values in this release may not add up due to rounding.
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SOURCE Ambev S.A.